Group Loan

GROUPLOANS -SHG / JLG: Features and Benefits:

Self Help Group / Joint Liability Group is a homogeneous group of micro entrepreneurs with affinity among themselves, voluntarily formed to save whatever amount they can conveniently save out of their earnings and mutually agree to contribute to a common fund of the group from which small loans are given to the members for meeting their productive and emergent credit needs at such rate of interest, period of loan and other terms as the group may decide.

Objective:

  • To meet the credit needs of the poor by combining flexibility, sensitivity and responsiveness of the informal credit system with the strength of technical and administrative capabilities and financial resources of the formal credit institutions. To build mutual trust and confidence between the bankers and the rural poor. To encourage banking activity both on thrift as well as credit side in a segment of the population that the formal financial institutions usually find difficult to cover.

Linkage Programme :

  • Direct Linkage to SHG through linked animator. The acceptable proportion of Savings to the loan could vary from 1:1 to 1:4 depending on the vintage of Group and assessment of the Group by the Bank.

Security & Security Documents:

  • Hypothecation of Assets created out of Bank finance with personal
  • guaranty and Group guarantee. Required to
  • execute Inter se Agreement by All members and articles
  • of agreement by authorized members
  • Lease Deed/Sale Deed


Repayment

  • Bank prescribes appropriate repayment period in negotiation with the Group which may range from 12 months to 60 months. Repayment may normally be in regular monthly installments / Weekly installments or as determined at the time of loaning based on local conditions, activities undertaken by members etc.Loans from SHGs to members could be repaid in appropriate installments which may be daily, weekly or market days fortnightly, monthly etc.
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